Ten state attorneys general on Wednesday accused Google of illegally abusing its monopoly on the technology that serves online ads, adding to the company’s legal woes with a case that strikes at the heart of its business.
State prosecutors said Google overcharged publishers for web ads and edged out rivals trying to challenge the company’s dominance. They also said Google had struck a deal with Facebook to limit the social network’s efforts to compete with Google for advertising dollars. Google said the lawsuit was “without merit” and would fight the case.
“If the free market was a game of baseball, Google has positioned itself as the pitcher, the batsman and the umpire,” Ken Paxton, Texas Attorney General, said in a Twitter video announcing the plans.
The lawsuit will add to the violent bipartisan backlash against one of the country’s biggest tech companies. Regulators in the United States and Europe have focused on the outsized role Amazon, Apple, Facebook, and Google play in the modern economy, shaping everything from how we buy to the information and entertainment we see.
In October, the Justice Department and 11 states said Google illegally maintained a monopoly on online search engines and the ads that appear in user results. A further lawsuit against Google, brought by a separate set of states, is expected soon. Last week, the Federal Trade Commission and more than 40 states accused Facebook of illegally crushing competition by acquiring young rivals and argued the company should be busted. Apple and Amazon are also the subject of federal antitrust investigations.
The lawsuit filed on Wednesday is the first by regulators in the United States to focus on tools that connect buyers of ad space with the publishers who sell it. Advertisements generate the vast majority of business profits.
But the costume also seemed to have a more partisan flavor. The prosecutors who signed the lawsuit are all Republicans, and he shouldn’t be part of the Justice Department’s case against the company. The other states’ lawsuit against Google, which could take place as early as Thursday, is expected to be signed by Republicans and Democrats and could be combined with the case of the federal agency.
Google’s own ad sales system has been developed over more than a decade. In 2007, Google bought DoubleClick, which offered ad technology and acted as a marketplace, in a deal that has since been criticized as being central to Google’s dominance. Google now controls the software at every step of the ad sales process.
Google claims that it competes with a wide range of companies when it comes to offering ad technology and that its services work with those offered by its competitors. In recent years, companies like AT&T and Amazon have attempted to capture more of the online ad sales market.
“Attorney General Paxton’s ad technology claims are baseless, but he went ahead despite all the facts,” Google spokeswoman Julie McAlister said. “We will firmly defend ourselves against his baseless allegations in court.”
Publishers like Rupert Murdoch’s News Corporation have long argued that Google’s dominance allows the company to demand a higher cut from every sale without contributing to the costs of content creation. Google’s success contrasts sharply with the shrinking of newsrooms and the closing of many local newspapers. This year, Google said it will pay news publishers more than $ 1 billion over the next three years through a new licensing program.
Mr Paxton led the investigation on Google even as he faced allegations of abuse of his office’s power. Seven of Mr Paxton’s lawyers said this year he had done a favor to a friend and donor and committed bribes. The employees have since left Mr Paxton’s office, have been placed on leave or have been dismissed outright.
Mr. Paxton was also charged with securities fraud in 2015. He has denied these charges as well as recent allegations made by his own employees.
This is a developing story. Check back for updates.
Daisuke Wakabayashi contributed reporting.